Tuesday, April 19, 2011

Bay Cleanup - Nearly $10,000 per Household

A report released April 18, by Sage Policy Group explains why Maryland’s plan to comply with new federal regulations designed to clean up the Chesapeake Bay would shrink the state’s economy by $10 billion, result in the loss of 65,000 jobs and cost the state, taxpayers and consumers more than $11 billion by 2017 — making the overall cost to Marylanders $21 billion, or $9,750 per household.

The Sage Group study, “The Impact of the Phase I Watershed Implementation Plan on Key Maryland Industries” was commissioned by the Maryland State Builders Association, which represents the state’s home builders, remodelers, suppliers and contractors...

The study is clearly issued by an interested party, so you should weigh it in that light. It looks like $11 billion is the estimate for the cost of the cleanup itself, and the remainder ($10 billion) is estimated economic costs resulting from those policies (say for example, inhibiting the building industry). There will certainly be such costs, but there will also some benefits. One thing you can be sure of is that estimates of the cost, by anyone, will be wrong (Khufu's Law: Nothing ever gets built on time or within budget), and one can guess the direction of the error by the interests of the parties that make the estimate.

I will be interested to see the response of the environmental lobby to this. If they focus on the fact that the study was funded by the builders, they don't have a good answer to the cost attack.

Question for readers: Are you willing to pay $10k out of your family budget to pay for the Bay Clean up (and probably more if you're above average income) over, say, the next 10 years? $5k? How much?